2012 (8) TMI 960 - AT - Income Tax

Assessment under section 153A - Held that - In view of the above discussions and also bearing in mind the binding nature of Special Bench decision in the case of All Cargo Logistics Ltd. (2012 (7) TMI 222 - ITAT MUMBAI(SB) ) we confirm the stand of the Commissioner (Appeals) wherein it has been held that where incriminating material found in the course of search proceedings relat ing to any assessment year the completed assessment for such years cannot be disturbed. The stand so taken by the Commissioner is consistent with the stand taken by the Special Bench Mumbai of this Tribunal which has been pointed out earlier is a binding judicial precedence for us. Accordingly grievances of the Assessing Officer are rejected.

Summary

Issues:
1. Challenge to correctness of Commissioner of Income Tax (Appeals)'s order in assessment under section 153A r.w.s. 143(3) for the assessment year 2001-02.
2. Deletion of addition of Rs. 17,94,690 in respect of different heads of expenditure without incriminating material found during search.

Analysis:
1. The Assessing Officer challenged the correctness of the Commissioner of Income Tax (Appeals)'s order regarding the assessment under section 153A r.w.s. 143(3) for the assessment year 2001-02. The main grievance raised was that the Commissioner erred in law by holding that if nothing incriminating is found during search proceedings, the completed assessment cannot be disturbed. The Assessing Officer argued that section 153A empowers the AO to assess or reassess the total income of six assessment years prior to the year of search. The representatives agreed that the issues in appeal are covered by a Special Bench decision in Mumbai, which stated that any addition to the income already assessed under section 153A should be based on incriminating material found during the search. The Tribunal confirmed the Commissioner's stand that if incriminating material is found during search proceedings, the completed assessment cannot be disturbed, in line with the Special Bench decision.

2. The second issue involved the deletion of an addition of Rs. 17,94,690 in respect of different heads of expenditure without any incriminating material found during the search. The Commissioner of Income Tax (Appeals) had deleted this addition, stating that it did not emanate from any incriminating material found during the search. The Assessing Officer contended that no such condition is stipulated in completing the assessment under section 153A or 153C of the Act. However, the Tribunal upheld the Commissioner's decision based on the Special Bench decision, which emphasized the need for incriminating material to make additions to the income already assessed. The Tribunal rejected the grievances of the Assessing Officer, leading to the dismissal of the appeal filed by the Revenue.

In conclusion, the Tribunal's decision in this case was based on the interpretation of the provisions of section 153A and the requirement of incriminating material for making additions to the income already assessed. The Tribunal followed the binding judicial precedence set by the Special Bench decision in Mumbai, which guided the outcome of the appeal and the rejection of the Assessing Officer's grievances.